Your recruiting team breathes a sigh of relief the moment your top candidate accepts your offer. A solid recruitment strategy and the right tech makes finding top talent a lot easier. However, can you be sure that your recruitment system works for you? Let’s talk about how to use recruiting metrics to measure the success of your system and strategy.
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Tracking recruitment metrics involves far more than answering whether or not your recruitment tactics paid off. This article will spotlight the components you need to measure the effectiveness of your recruitment tactics and, by extension, how well your recruiting system adds value to your hiring process.
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What Are Recruiting Metrics?
Recruitment metrics are a set of standard measurements used to track and analyze hiring success. The measurements capture the effectiveness of different steps in the recruitment process and provide the insight needed to optimize resources and make improvements.
Top Recruiting Metrics To Track
Measuring the success of your recruiting system and strategy takes more than calculating ROI. While analyzing how expenses yield provides insight into the strengths and weaknesses of your recruiting methods, how do you calculate subjective factors like quality?
Measure the quantifiable and abstract complexities of recruiting using a metric-driven approach. Without further ado, here’s our list of the most important recruiting metrics:
1. Time To Fill
Time to fill measures the days to hire a new employee for a position. It refers to the time between job requisitions approval and the date of offer letter acceptance.
First, define the start and end points and then calculate the days between the two. Typically, the starting point is the day the job requisition is approved, and the endpoint can be when you make an offer, when the candidate accepts the offer or when the new hires start the job.
Time To Fill = Date of Offer Acceptance − Date of Job Requisition Approval
Imagine your organization has a vacancy for a software engineer. You approve the job requisition submitted by the hiring manager on January 1. Your HR team manages the recruiting activities to find the top candidate who accepts the job offer on February 1. The time to fill is 31 days.
It’s up to you to decide how granular you want the data to be. Measuring this metric for different roles and departments helps identify how long it can take to hire for different seniority levels and the differences between hiring for various departments.
Calculating the time to fill can help:
- Determine whether your recruiting process should be shorter.
- Identify time-consuming activities and take the necessary steps to prevent candidates from opting out of the process.
- Set benchmarks based on the average days it takes to hire for specific positions.
2. Time To Hire
While many businesses use the time to fill and time to hire interchangeably, separating the two measurements provides two different insights.
Time to fill starts when you identify a need to hire until your top candidate accepts the offer, while time to hire counts the days from when your eventual hire applies for the job until the date they accept the job offer.
The critical point of difference is the days of counting. So while time to hire indicates your recruitment process timeline, time to hire measures how quickly you can spot top talent and move them through talent pipelines.
Time To Hire = Day of Job Offer Acceptance − Day Candidate Entered the Pipeline
To put things into perspective, consider the day you submit a job requisition is day 1. Your new hire enters the pipeline on day 10. After you screen and evaluate your potential hire, you make an offer, and they accept the job on day 30. The time to hire is 30 days − 10 days = 20 days.
Measuring the time to hire is vital in the following ways:
- Determines the effectiveness of your talent selection process in narrowing down on the top talent.
- Reveals the depth of your candidate database and how quickly you can leverage candidate pools to match qualified candidates to open roles.
- Breaks down the candidate selection process and analyzes key areas for improvement.
3. Source of Hire
Source of hire analyzes how your candidates find out about job opportunities in your company. This metric indicates the percentage of overall hires made from different talent-sourcing methods.
Percentage of Hires From a Specific Source = Number of Hires / Total Number of Candidates From a Specific Source
Let’s say your organization hired 50 people in the past six months. According to your recruiting system, 10 new hires are referrals and 20 applied from job boards. So, employee referrals constitute 20%, while job boards make up 40% of your hires.
iCIMS offers advanced analytics to track number of candidates and hires made from different talent sourcing channels. Source
Source of hire is a valuable tool to determine recruiting budgets since it breaks down your talent sources into percentages of hires. Calculating the source of hire helps with the following:
- Determining top-performing talent sources and directing more resources to increase applicants.
- Tightening recruiting costs by identifying and removing low-traffic candidate sources from your strategy.
- Investing in different talent sourcing channels after comparing various sources for a particular role in a given time frame.
- Identifying talent sources that bring in the most ROI.
4. Quality of Hire
Quality of hire measures the value new hires bring to your organization and how their contributions impact your company’s bottom line. While it’s difficult to measure qualitative characteristics, you can take quantifiable factors like performance metrics that indicate top quality into consideration.
Quality of Hire = Indicator 1 % + Indicator 2 % + Indicator 3 % …Indicator N % / Total Number of Indicators
Quality indicators can be performance metrics, task completion rates, engagement scores and team collaboration. Ultimately, you’ll need to customize the formula to cater to the nature of the open role, the responsibility level and the industry.
Here’s why measuring the quality of hire is important:
- Determines how much a new employee contributes to your company’s long-term success.
- Locates effective talent channel sources that bring in quality hires.
- Reinforces your workforce and company culture with good fits.
5. Percentage of Open Positions
Each role in your company is different. Hiring for a specific department might be easier than a position in another department. Three out of four companies find it challenging to find people with the right blend of technical and soft skills.
So, how can you identify which positions in your company are the most difficult to fill? The solution: measuring the percentage of open positions across every department.
Zoho Recruit provides an overview of open positions at different stages of the pipeline. Source
The percentage of open positions measures the number of vacancies in each department compared to your organization’s total number of vacancies.
Percentage of Open Positions = (Total Number of Open Positions / Total Number of Positions in the Company) x 100
Here’s how measuring the percentage of open positions reveals the relationship between your talent needs and the current talent market:
- A high percentage of open positions for a department indicates high demand for those positions.
- A higher percentage might indicate a low supply of qualified talent for a specific role.
- Comparing open role percentages uncovers key talent trends to take note of while building effective suitable talent acquisition strategies.
6. First-year Attrition Rate
There can be many reasons a new hire leaves your organization within the first year. However, miscommunicating responsibilities or mismanaged expectations shouldn’t be why you hire the wrong candidate.
First-year Attrition = (Number of Employees Who Leave the Company Within a Year / Total Number of Employees Who Separated During the Same Period) x 100
Calculating first-year turnover helps identify root causes for movement out of your organization.
Calculating first-year attrition helps identify the root causes of first-year turnover by assessing the following:
- The accuracy of job posts and job descriptions in conveying critical details of the role.
- The level of transparency displayed by your hiring team during the process.
- The value of your talent screening methods in identifying top matches for an open position.
7. Cost per Hire
How do your recruiting efforts impact your company’s bottom line? ROI is a direct indicator of whether your recruiting efforts are paying off. Cost per hire is the tool you need to determine if all your recruiting tools, tactics and methods are worth it.
Cost per hire calculates the total cost of finding, screening, evaluating and hiring a new employee for a vacancy. It takes into account external and internal expenses like recruiter salaries, job advertising costs, staffing agency fees and background checks and divides the sum by the number of hires made.
Cost of Hire = Total Internal Costs + Total External Costs / Total Number of Hires
Jobvite’s advanced analytics provides a deep-dive into recruting costs. Source
Cost of hire is a valuable measurement for the following:
- Setting budgetary benchmarks for future vacancies.
- Identifying high-investment job roles.
- Estimating the resources needed for specific jobs.
- Allocating resources for future hires.
8. Selection Ratio
The selection ratio, also called the applicant-to-hire ratio, reflects the number of hires compared to the overall number of candidates.
Selection Ratio = Number of Hires / Total Number of Candidates
Let’s assume there’s a vacant post in your company. You receive ten applications but hire one person for the job. The selection ratio is 1/10 = 0.1
The higher the number of applications, the closer the selection ratio will be to zero. A low selection ratio means your team can be judicious in selecting the ideal person for the job. On the other hand, a higher ratio indicates that you may have too many open roles and smaller candidate pools.
The selection ratio is vital to analyze the following key aspects of your recruiting tools and talent-sourcing channels:
- The popularity of a role based on the number of applications per hire.
- The success of candidate sourcing tools in improving outreach and receiving more applicants.
- The visibility of your employer brand and the ability to encourage more job seekers to apply.
- The need for process automation or pre-hire assessment tools to streamline high-volume hiring.
9. Offer Acceptance Rate
Once you’re confident you’ve found the top candidate, it’s time to share the good news with them. However, recruiting is a two-way street, and once you make an offer, it’s up to your potential hire to accept or decline.
To seal the deal, you must make an offer that aligns with your company’s requirements and the candidate’s expectations. As the name suggest, the offer acceptance rate counts the number of candidates who accept your job offer compared to the total number of candidates who received job offers.
Offer Acceptance Rate = Number of Offers Accepted / Number of Offers Made
Sometimes, potential hires turn down the job. Still, too many potential hires declining the job can point towards a more significant issue. Calculating the offer acceptance rate provides data needed to uncover why your selected candidates changed their minds at the end of the hiring process:
- Compensation Expectations: In a study by Criteria, job seekers cited that the top reason for declining job offers is misaligned salary expectations. Consider discussing salary expectations with the candidate during the interview or listing the pay range in the job description to manage expectations better.
- Terms of Employment: Apart from the salary, mention the other vital advantages of being part of your organization. Consider the benefits and perks you offer, like health insurance, time off and flexible work options, based on your industry standards.
- Quality of Offer: A low acceptance rate might suggest that your candidate found a better offer from a rival company. Developing well-rounded offer letters provides your company with a competitive edge.
Hiring managers can track offer acceptance rates on Jobvite’s analytics dashboard. Source
10. Application Completion Rate
According to Appcast’s recruitment benchmark report, 67% of all job seekers completed their applications on a mobile device. Optimizing the application process is one way to ensure better user experiences. As an employer, you must be attentive to how well your job application platform supports candidates and encourages them to apply.
The applicant completion is ideal for measuring the success of your job application platform by comparing the number of candidates who start the application process with those who complete and submit their applications.
Application Completion Rate = Number of Job Applications Received / Total Number of Job Applications Started
This measurement checks how intuitive or user-friendly your career pages and job application platform are. A low application completion rate means many of your candidates are abandoning the process mid-way.
A job application platform that’s difficult to navigate will discourage applicants from completing their job applications. Locating issues and addressing them will help you increase submissions.
Consider the following factors that can prevent job seekers from applying:
- A poorly structured platform.
- A lengthy application process with too many data fields.
- Sensitive or irrelevant questions.
- Technical issues or bugs in career pages.
11. Sourcing Channel Effectiveness
Your talent sourcing methods are the key to building a deep and diverse pool of talent. Calculating sourcing channel effectiveness measures the quality and the number of candidates generated by every talent source.
The quantitative approach counts the number of candidates from sources in a given period and compares which channel produces the most candidates. At the same time, the qualitative approach focuses on the number of qualified candidates generated from talent channels in a given period.
Sourcing Channel Effectiveness = The Number of Candidates From Different Talent-sourcing Channels in a Given Timeframe and Compare Which Channel Produces the Highest Quality or Quantity of Candidates
Calculating sourcing channel effectiveness will provide the data to make informed decisions about the following:
- Allocating recruitment marketing budgets for future hires.
- Adjusting recruiting costs by investing less in low-yielding talent channels or increasing the flow of resources to high-impact sources.
- Locate channels ideal for building candidate pools for specialized and non-specialized roles.
12. Candidate Net Promoter Score
Like your customers, potential hires also interact with your brand and develop perceptions along the way. Your company brand matters and is vital to making positive, lasting impressions.
Treating your candidates like customers is the key to providing personalized experiences, and measuring the candidate’s net promoter score helps prioritize the candidate’s journey at every step.
Candidate Net Promoter Score (cNPS) = Percentage of Promoters − Percentage of Detractors
Similar to how the traditional net promoter score (NPS) measures customer loyalty, the cNPS analyzes feedback from candidates based on how likely they are to recommend your organization to a friend or colleague, typically on a scale from zero to 10.
Based on the ratings, organize your past candidates into three categories:
- Promotors: People who scored their experience nine or 10 will most likely share their positive experiences in their social and professional circles.
- Detractors: Candidates who answered between zero and six are least likely to recommend your company to others.
- Passives: Individuals who rated the experience seven or eight. These are the candidates who remained unphased or impassive.
After running the feedback through the formula mentioned above, the score will range from -100 to 100. If you score a positive 100, it means everyone’s a promoter!
Here’s an example: assume you collected feedback from five candidates, who answered six, seven, eight, nine and 10, respectively. In this case, you have one detractor (20% of everyone), two passives (40% of candidates) and one promoter (40% again). In this case, your cNPS is 20.
A positive score indicates that your company was able to deliver the expectations set during the recruiting process.
Greenhouse lets you create and send candidate experience surveys to collect feedback. Source
Candidate NPS is vital in the following ways:
- Outshine your competitors by improving what your past candidates share about your company on websites like Glassdoor.
- Earn goodwill by providing enhanced candidate experiences.
- Assess negative feedback to uncover underlying issues in the recruiting process.
- Calculate the overall candidate satisfaction levels and find ways to improve candidate journeys further.
13. Hiring Manager Satisfaction
Last but not least, hand over the mic to your hiring managers. Finding hiring managers’ satisfaction rate concerning the candidates interviewed. A successful recruiting process is an combination of the quality of your talent-sourcing channels, talent pipelines and evaluation tools to zero in on the ideal candidate from the candidate pool.
However, this metric is highly subjective, so while there’s no formula to calculate it, there are different methods to calculate hiring manager satisfaction. Develop and deploy surveys with scoring ranges that indicate a level of satisfaction.
Collecting feedback periodically allows you to uncover problem areas based on which you can take the next steps to improve the process.
Here’s why you shouldn’t overlook inputs from your hiring managers:
- Positive managerial feedback indicates that the selected candidates are likely a good fit.
- You’ll uncover gaps in the recruiting processes that might be negatively impacting other metrics.
Recruiting Metrics Cheat Sheet
If that seemed like a lot of information to process, here’s a streamlined list of the recruiting metrics. Consider printing the cheat sheet for quick reference:
- Time To Fill = Date of Offer Acceptance − Date of Job Requisition Approval
- Time To Hire = Day of Offer Acceptance − Day Candidate Entered the Pipeline
- Percentage of Hires From a Specific Source = Number of Hires / Total Number of Candidates From a Specific Source
- Quality of Hire = Indicator 1 % + Indicator 2 % + Indicator 3 % … + Indicator N % / Total Number of Indicators
- Percentage of Open Positions = (Total Number of Open Positions / Total Number of Positions in the Company) x 100
- Selection Ratio = Number of Hires / Total Number of Candidates
- First-year Attrition = (Number of Employees Who Leave the Company Within a Year / Total Number of Employees Who Separated During the Same Period) x 100
- Cost of Hire = Total Internal Costs + Total External Costs / Total Number of Hires
- Offer Acceptance Rate = Number of Offers Accepted / Number of Offers Made
- Application Completion Rate = Number of Job Applications Received / Total Number of Job Applications Started
- Sourcing Channel Effectiveness = Number of Candidates From Different Talent-sourcing Channels in a Given Timeframe and Compare Which Channel Produces the Highest Quality or Quantity of Candidates
- Candidate Net Promoter Score (cNPS) = Percentage of Promoters − Percentage of Detractors
- Hiring Manager Satisfaction = Calculate Scores From Satisfaction Surveys
Next Steps
Finding top talent in record time is like catching lightning in a bottle. Even the most advanced recruiting technologies fail without the right measurements to track progress. A clear understanding of your company-specific hiring goals will help you set relevant benchmarks.
Next, assess if your recruitment processes would always find the most qualified applicants quickly, making it easy to find and retain skilled candidates. Unfortunately, that is not always the case. If your current recruitment system isn’t being as helpful as you wanted it to be, then it might be time to find a new solution that will meet your organization’s needs. If that’s the case, then consider reviewing all of our recruitment reference materials to help guide your search for a new solution that delivers everything you need.
Which recruiting metrics are most relevant to you? How do you measure the success of your recruiting system and strategy? Let us know by leaving a comment below!